Feds putting $35M into region to save small-firm jobs
Regional economic development organizations that give small businesses access to low-interest loans in Pennsylvania are set to receive $35.5 million in new federal funding, aimed at getting capital into the hands of businesses so they can keep jobs, hire more workers and solidify their footprint in the midst of the COVID-19 pandemic.
The funding is being administered by the U.S. Department of Commerce’s Economic Development Administration, which recently received $1.5 billion from March’s Coronavirus Aid, Relief, and Economic Security Act (CARES) Act.
Pennsylvania’s haul was announced Friday by Sen. Bob Casey, who said in a statement that it will “help struggling small businesses and entrepreneurs that have been negatively affected” by the pandemic.
“I supported EDA funding in the CARES Act and will continue to fight for Pennsylvania’s small businesses, ensuring that minority-owned businesses receive funding and improving oversight so that these grants reach the truly small businesses that need it most,” Mr. Casey said.
The leading recipient of the funding is the Regional Development Funding Corporation in Allegheny County, which will be able to dole out $7.6 million in loans to businesses in the region that apply for them.
When the organization normally approves loans from the Commerce Department funds, they’re available to businesses in the city of Pittsburgh and the rest of the county, and they require that one job must be created for every $30,000 borrowed.
The minimum loan amount is $25,000 and the maximum is $250,000, but financing is usually around a third of project costs.
“[The corporation] considers many factors when underwriting a proposed loan. Cash flow and the ability to repay all project debt are primary considerations,” the group says, noting that the funds can be used to acquire land and make improvements, purchase a building or equipment, or for working capital.
Also receiving new loan capital is the Southern Alleghenies Planning and Development Commission — $4.3 million that will go to support businesses in
Cambria, Blair, Huntingdon, Somerset, Bedford and Fulton counties. Businesses in Indiana County are listed to receive $1.3 million.
The Allegheny County Industrial Development Authority is getting $530,000, and the Southwestern Pennsylvania Commission — which services Allegheny, Armstrong, Beaver, Butler, Fayette, Greene, Indiana, Washington and Westmoreland counties — is slated to receive $1.1 million.
The commission says it has helped local stakeholders access more than $35 billion in state and federal funding that has been allocated to the region through 2045.
Its operation of the loan fund backed by the Commerce Department is
“designed to provide [the commission’s] small business clients with low interest financing for land and building acquisition and construction, machinery and equipment purchases, and working capital to businesses unable to fully finance projects with equity, bank financing or other private and public sources,” their website says.
Businesses that want a loan through that commission must have fewer than 100 employees, provide 1to-1 matching from other loans or equity, and must create one job for every $50,000 borrowed or retain one job for every $35,000 borrowed.